Michigan has been hit hard by global economic conditions despite its relatively decent economic policies. Unfortunately, Great Lakes states cannot afford merely “decent” policies; they have to be outstanding to overcome the headwinds they face in global markets and to compete with neighboring states such as Indiana.
Michigan’s local tax burden is relatively low, probably because of a school finance centralization accomplished by ballot initiative in the 1990s. The state tax burden has historically been higher than the national average, but it fell substantially in the early 2000s. It fell further with a tax cut in 2013–14, to a projected 5.8 percent of personal income in FY 2015. Government debt has also fallen somewhat since 2008 and is now about average. Government employment fell from 13.2 percent of the private workforce in 2010 to 11.5 percent today. Government subsidies are slightly lower than average. Michiganders do have reasonable freedom of choice among local governments, with about one per 100 square miles, but the centralization of school finance has made this choice less significant.
Michigan has little zoning restriction, but it has ratcheted up renewable portfolio standards since 2010. It also has a relatively high minimum wage for the local economy. A right-to-work law was enacted in 2012. Freedom from abusive lawsuits has been worse than average in Michigan since 2000, but it has improved some since 2008, though not because of any statutory or institutional change. Occupational freedom is about average but has declined in the past four years, due to new occupations’ being licensed. Michigan has had deregulated telecommunications and cable since 2006. The state had among the fewest mandated health insurance benefits for small-group plans in 2010.
On personal freedom, Michigan is hurt by the fact that it had a super-DOMA banning same-sex partnerships of all kinds in 2014. It will rise in the future (see Appendix Table B17). On criminal justice policy, Michigan arrests somewhat fewer than average for victimless crimes, but it has a fairly high incarceration rate. Those rates have been stable over time. The asset forfeiture law is better than average, but it is frequently circumvented. Smoking bans are comprehensive, and cigarette taxes are high. Educational freedom is low. Although homeschools are scarcely regulated, private schools face many barriers. The state has no private school choice programs, and compulsory schooling has extended to 12 years since 2009. Michigan does score a bit above average for gambling freedom, an area that grew in 2011–12. Travel freedom also grew a bit when the state repealed its motorcycle helmet law in 2013–14. The state scores better than average on cannabis freedom because it has had a reasonably broad medical marijuana law since 2008. Alcohol and firearms freedoms are only about average.